Correlation Between Ningxia Younglight and Jiangxi Ganfeng
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Jiangxi Ganfeng Lithium, you can compare the effects of market volatilities on Ningxia Younglight and Jiangxi Ganfeng and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ningxia Younglight with a short position of Jiangxi Ganfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Jiangxi Ganfeng.
Diversification Opportunities for Ningxia Younglight and Jiangxi Ganfeng
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Jiangxi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Jiangxi Ganfeng Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Ganfeng Lithium and Ningxia Younglight is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ningxia Younglight Chemicals are associated (or correlated) with Jiangxi Ganfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Ganfeng Lithium has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Jiangxi Ganfeng go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Jiangxi Ganfeng
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.09 times more return on investment than Jiangxi Ganfeng. However, Ningxia Younglight is 1.09 times more volatile than Jiangxi Ganfeng Lithium. It trades about 0.01 of its potential returns per unit of risk. Jiangxi Ganfeng Lithium is currently generating about -0.03 per unit of risk. If you would invest 956.00 in Ningxia Younglight Chemicals on September 3, 2024 and sell it today you would lose (113.00) from holding Ningxia Younglight Chemicals or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Jiangxi Ganfeng Lithium
Performance |
| Timeline |
| Ningxia Younglight |
| Jiangxi Ganfeng Lithium |
Ningxia Younglight and Jiangxi Ganfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Jiangxi Ganfeng
The main advantage of trading using opposite Ningxia Younglight and Jiangxi Ganfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Jiangxi Ganfeng can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jiangxi Ganfeng will offset losses from the drop in Jiangxi Ganfeng's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Rongsheng Petrochemical Co | Ningxia Younglight vs. Hoshine Silicon Ind |
| Jiangxi Ganfeng vs. Dymatic Chemicals | Jiangxi Ganfeng vs. Yingde Greatchem Chemicals | Jiangxi Ganfeng vs. Ningxia Younglight Chemicals | Jiangxi Ganfeng vs. Shandong Polymer Biochemicals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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